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There is a surge of protectionism and populism worldwide. From President Trump’s Protectionist Rhetoric and his America First and Make America Great Again slogans to the rise of Anti Immigrant sentiment in Brexit Britain and the latent hyper nationalism in other countries around the world, there is a backlash against globalization.
Considering the fact that global corporations base their business model on Free Trade and Globalization, these trends are worrying for them. Indeed, if anti globalist sentiment picks up pace, soon global corporations have to think about ways and means to workaround or simply retool their business models.
Having said that, it is also the case that global corporations for now have are managing to survive and reorient their strategies accordingly. This has taken the form of localization where global corporations are increasingly reverting to purely local hiring and national cultural and market based dynamics so that they are in tune with the popular mood in those countries.
Indeed, we have come a long way from purely global strategies to hybrid Glocal strategies to purely local ones. Thus, it can be said that the wheel is coming full circle as far as such strategies are concerned.
The localization strategies that are being implemented can take many forms. For instance, Indian IT (Information Technology) firms such as TCS (Tata Consultancy Services), Infosys, and Wipro are ramping up hiring of local candidates in the United States in response to the protectionist sentiments.
With H1B visas being hard to get as well as a general crackdown on immigration, these firms hope that by embracing localization, they can be in the good books of both their clients and the government.
Of course, their clients remain global in dispersion and hence, despite anti globalist rhetoric, the existing arraignments are going to stay in place.
Moreover, the anti globalist sentiment has not yet affected financial services and the equity and bond markets as can be seen from the surging FDI (Foreign Direct Investment) into markets worldwide.
In purely ideological terms, this does not make sense since protectionism cannot hut the very workers who are supposed to be the beneficiaries whereas the other layers and especially the topmost beneficiaries are left untouched.
The reason for mentioning this is to highlight how you, the reader, who can be an aspiring or working professional would be affected by these trends.
For instance, if you are dreaming of working in a foreign country after a few years in your career or are wishing to go abroad for higher studies, the present protectionism would indeed hurt you. Starting with the application process and the visa process, chances are that you need to be prepared for rejections or at least difficulties in obtaining the same.
Further, you might need to pay more as a premium in terms of fees and housing. On the other hand, if you are a working professional, you need to base your aspirations of a foreign stint accordingly.
In other words, be as realistic as possible when evaluating your chances of a foreign degree or assignment.
It also helps if you choose countries other than the United States for your studies or work. Indeed, Canada is welcoming to immigrants and though Australia has somewhat tightened the screws, it is still accepting foreign students and workers.
Having said that, another problem that you might encounter is the very real racism and prejudice towards foreigners which means that you need to be careful when you choose the regions or the cities for your careers and studies. Thus, by diligent planning and evaluation, you can still prosper abroad.
The increasing protectionism worldwide has an effect on exporters and importers of goods and services. For instance, Indian and Chinese exporters are now facing large tariffs for their goods in the United States.
In addition, outsourcing of services has also dipped which means that not only large corporates but also individuals such as Freelancers, lawyers working for global law firms based in India on outsourced legal projects, and even Medical Transcriptionists all have to contend with the changing rules and regulations as a result of protectionism.
Thus, the fluid situation is increasing uncertainty and complexity for anyone, whether a corporate, professional, student, or a freelancer who depends on global business models. Given the fact that this is likely to continue for some time to come, a lot depends on how well all stakeholders respond to fast changing market dynamics.
As mentioned earlier, we have moved from global to Glocal to local all within a few decades. Thus, given the pace of these changes, it would not be surprising if more drastic changes come our way.
Corporates are responding by being global, Glocal, and local at the same time. Exporters are responding by scouring for alternative markets. Individuals are responding by being realistic about their chances.
The bottom line here is adaptability and flexibility. Indeed, even the Indian and Chinese governments are encouraging alternatives to the United States and Europe as markets for goods and services.
Already, there is a tendency to be as multilateral as possible in terms of treaties and trade agreements. This is in response to the US pulling out of multilateral treaties and insisting on bilateral ones. This indicates a multi polar world where the US is no longer the dominant player. To conclude, protectionism is here to stay and all of us should be prepared for it.
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What the Current Wave of Protectionism and Populism mean for the Future of Globalization and Free Trade
February 12, 2025
